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Why Old Republic International (ORI) is a Great Dividend Stock Right Now
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Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Old Republic International in Focus
Old Republic International (ORI - Free Report) is headquartered in Chicago, and is in the Finance sector. The stock has seen a price change of 8.1% since the start of the year. The insurance underwriter is paying out a dividend of $0.26 per share at the moment, with a dividend yield of 3.34% compared to the Insurance - Multi line industry's yield of 2.24% and the S&P 500's yield of 1.57%.
Looking at dividend growth, the company's current annualized dividend of $1.06 is up 8.2% from last year. Over the last 5 years, Old Republic International has increased its dividend 5 times on a year-over-year basis for an average annual increase of 5.36%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, Old Republic's payout ratio is 39%, which means it paid out 39% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for ORI for this fiscal year. The Zacks Consensus Estimate for 2024 is $2.73 per share, representing a year-over-year earnings growth rate of 3.80%.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. However, not all companies offer a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that ORI is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Why Old Republic International (ORI) is a Great Dividend Stock Right Now
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Old Republic International in Focus
Old Republic International (ORI - Free Report) is headquartered in Chicago, and is in the Finance sector. The stock has seen a price change of 8.1% since the start of the year. The insurance underwriter is paying out a dividend of $0.26 per share at the moment, with a dividend yield of 3.34% compared to the Insurance - Multi line industry's yield of 2.24% and the S&P 500's yield of 1.57%.
Looking at dividend growth, the company's current annualized dividend of $1.06 is up 8.2% from last year. Over the last 5 years, Old Republic International has increased its dividend 5 times on a year-over-year basis for an average annual increase of 5.36%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, Old Republic's payout ratio is 39%, which means it paid out 39% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for ORI for this fiscal year. The Zacks Consensus Estimate for 2024 is $2.73 per share, representing a year-over-year earnings growth rate of 3.80%.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. However, not all companies offer a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that ORI is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).